The Global Fund to Fight AIDS, Tuberculosis, and Malaria: Background and Current Issues

CRS Report for Congress
The Global Fund to Fight AIDS,
Tuberculosis, and Malaria: Background
Updated April 26, 2006
Tiaji Salaam
Analyst in Foreign Affairs
Foreign Affairs, Defense, and Trade Division

Congressional Research Service ˜ The Library of Congress

The Global Fund to Fight AIDS, Tuberculosis, and
Malaria: Background
The Global Fund to Fight AIDS, Tuberculosis, and Malaria, headquartered in
Geneva, Switzerland, is an independent foundation intended to attract and rapidly
disburse new resources in developing countries for the struggle against infectious
disease. The Fund is a financing vehicle, not a development agency, and its grants
are intended to complement existing efforts rather than replace them.
The origins of the concept of an independent funding mechanism to fight AIDS
and other diseases lie partly in a French proposal made in 1998, in ideas developed
in the 106th Congress, and in recommendations made by U.N. Secretary General Kofi
Annan in April 2001. President Bush made the “founding pledge” of $200 million
for a disease fund in May 2001. The Global Fund was established in January 2002,
following negotiations involving donor and developing country governments, non-
governmental organizations (NGOs), the private sector, and the United Nations.
As of March 31, 2006, the Global Fund has approved more than 350 grants
totaling nearly $5.2 billion for projects in more than 131 countries, of which about
$2.1 billion has been disbursed in 127 countries. To date there have been five
“rounds” of funding, with the Board approving proposals in April 2002, January

2003, October 2003, June 2004, and September 2005. However, in September 2005,

due to a lack of available funding from donors, only a portion of proposals
recommended for approval in Round 5 were officially approved. The remaining
tentatively approved proposals received final approval in December 2005 after
additional contributions were made. The Global Fund will make grants only if it has
funds on hand to cover the first two years of the proposed projects — an approach
known as the Comprehensive Funding Policy. The policy is designed to avoid
disruptions to projects due to funding shortages. This is regarded as a particularly
important consideration with respect to antiretroviral therapy, since interruptions in
treatment can lead to the emergence of resistant strains of HIV and to death. Funding
for the third through fifth years of the projects is dependent on new contributions to
the Global Fund by donors.
This report will not be updated. Instead, for up-to-date information on the Fund
refer to CRS Report RL33396, The Global Fund to Fight AIDS, Tuberculosis, and
Malaria: Progress Report and Issues for Congress.

Background ......................................................1
Origins ..........................................................2
Grants ...........................................................3
Process and Procedure..............................................4

The Global Fund to Fight AIDS,
Tuberculosis, and Malaria:
In January 2002, the Global Fund to Fight AIDS, Tuberculosis, and Malaria,
was established in Geneva, Switzerland. The Fund provides grants to developing
countries aimed at reducing the number of HIV, tuberculosis (TB), and malaria
infections, as well as the illnesses and deaths that result from such infections. The
Fund is an independent foundation, and its board of directors consists of
representatives of seven donor countries and seven developing countries. The board
also includes one representative each from a developed country non-governmental
organization (NGO), a developing country NGO, the private sector, a contributing
private foundation, and the community of people living with HIV/AIDS,
tuberculosis or malaria.
The Executive Director of the Global Fund is Dr. Richard Feachem, a British
physician who has held teaching and administrative positions related to international
health in the United States and Britain. Dr. Feachem announced in March 2006 that
he will leave his position at the Global Fund when his contract expires on July 15,
2006. He has been the Executive Director since July 2002, when he became the
Fund’s first Executive Director. A successor has not yet been named. In April 2005,
Dr. Carol Jacobs, Prime Minister of Barbados, was elected to succeed Tommy
Thompson as Chair of the Global Fund’s Board of Directors. Tommy Thompson
was chosen as the Fund’s first Chairman of the Global Fund when he was serving as
the U.S. Secretary of Health and Human Services (HHS). According to Global Fund
bylaws, the two-year chairmanship rotates cyclically between the groups of donors,
developing countries, and non-governmental organizations (NGOs). Ambassador
Randall Tobias resigned from his position as the U.S. representative on the board in
March 2006, leaving the position vacant. Some believe that he resigned from his
duties in anticipation of becoming the first Director of United States Foreign
Assistance and to concurrently serve as Administrator of the United States Agency
for International Development (USAID). If Congress confirms the President’s
nomination of Ambassador Tobias, he will hold the rank of Deputy Secretary of
The Global Fund’s efforts are intended to mitigate the impact of infectious
disease on countries in need and thus to contribute to a reduction in poverty. The
Fund projects that over five years, the grants it has approved will have treated 1.8
million HIV-positive people with antiretroviral (ARV) therapy and 5 million people
infected with TB through the Directly Observed Treatment Short-Course (DOTS),
which emphasizes watching the infected patient take his or her medication every day

for several months.1 In addition, the Global Fund projects that 52 million people will
be reached through voluntary counseling and testing services for preventing the
spread of HIV, over 1 million orphans will receive support, and 145 million malaria
patients will receive the new artemisinin-based combination drug treatments (ACT).
Artemisinin-based treatments have been found effective in dealing with drug-
resistant varieties of malaria. The Fund is also financing the purchase and
distribution of 109 million insecticide-treated bed nets to prevent the spread of the
Global Fund documents emphasize that it is a financing instrument
complementing existing programs and that it is intended to attract, manage, and
disburse additional resources, rather than re-channel existing resources. The Fund is
a fiduciary agent designed to direct new resources to programs in countries in need,
rather than an agency that implements projects. The Global Fund is not a United
Nations agency, although it works closely with U.N. agencies, as well as with other
aid agencies and NGOs involved in the struggle against the three diseases. The World
Bank serves as the Global Fund’s trustee, receiving contributions made by donors
and disbursing funds as the Global Fund directs.
The concept of an independent funding mechanism to fight infectious disease
has a number of roots. France proposed an international fund to provide AIDS
treatment in the developing world at the 1998 G-8 summit, held in Birmingham,2th
England, reportedly to a cool reception. In August 1999, during the 106 Congress,
Representative Barbara Lee introduced the AIDS Marshall Plan Fund for Africa Act
(H.R. 2765). This bill, which did not come to a vote, would have established an
AIDS Marshall Plan Fund for Africa Corporation as an independent U.S. agency able
to receive contributions from foreign governments as well as private sources. In
January 2000, again in the 106th Congress, Representative James Leach introduced
the Global AIDS and Tuberculosis Relief Act of 2000 (H.R. 3519), which passed
both the House and Senate and was signed into law (PL. 106-264) in August 2000.
H.R. 3519 included provisions supporting the creation of a World Bank AIDS Trust
Fund. Had it been created along the lines indicated in H.R. 3519, this fund would
have made grants to governments and NGOs in order to stem the spread of AIDS and
promote affordable access to treatment. The Foreign Operations Appropriations3
legislation for FY2001, enacted in late October 2000, provided up to $20 million for
a U.S. contribution to an international HIV/AIDS fund.
U.N. Secretary General Kofi Annan urged the creation of an independent
funding vehicle on April 26, 2001, in a speech to African leaders gathered at a
summit on HIV/AIDS and other infectious diseases in Abuja, Nigeria. Annan
introduced the term “Global Fund” and said there should be a “war chest” of $7

1 Global Fund, Progress Report. January 21, 2005, at [].
2 “France Continues Pressure for Global AIDS Fund,” Reuters, June 30, 1998.
3 H.R. 5526, enacted by reference in Sec. 101(a) of P.L. 106-429.

billion to $10 billion per year for the struggle against AIDS. (Subsequently, experts
said that $7 billion to $10 billion was the amount required by 2005 from all sources,
not just the Global Fund.) Annan’s proposal attracted considerable attention, and
on May 11, 2001, Annan came to the White House, with Nigeria’s President
Olusegun Obasanjo, to hear President George W. Bush make a “founding pledge” of
$200 million to a global fund. The President added that more would follow “as we
learn where our support can be most effective.”4 Moreover, he emphasized that the
fund should be a public-private partnership, drawing upon the contributions of
private corporations, foundations, faith-based organizations, and NGOs.
The creation of a Global Fund was endorsed by the United Nations General
Assembly Special Session on HIV/AIDS (UNGASS), held in June 2001, and by the
Group of Eight (G-8) summit of industrialized countries plus Russia, meeting in
Genoa, Italy, in July 2001. The G-8 partners affirmed that the Global Fund would
be a public-private partnership, and their final communique stated that “we are
determined to make the fund operational by the end of the year.”5 In October 2001,
a Transitional Working Group (TWG) was convened, which included representatives
of developing and donor countries, NGOs, the private sector, and the United Nations.
In December, the TWG reached agreement on documents related to Global Fund
governance, accountability, and other issues. The Global Fund held its first board
meeting in January 2002.
On September 30, 2005, the Global Fund announced that it had approved a fifth
round of grant proposals, committing $382 million over two years to 26 grants in 20
countries. Due to insufficient pledge levels, the Board was only able to approve
grants totaling the pledges received for the corresponding calendar year. However,
the Board decided to approve the remaining 37 grants as the money became available
in 2006. The United States and other Global Fund board members had been
concerned that initial plans to launch Round 5 in November were too ambitious in
view of the Fund’s resource constraints (see below). Final approvals for Round 5
grants were made at its final board meeting in December 2005.
Round 5 grants, like those approved in the four earlier rounds, are slated to last
for five years and will be subjected to a thorough review after two years before
additional funds are provided. The Global Fund stresses that it is a “performance-
based” agency, and funds are disbursed in increments as the recipients achieve goals
they have set for themselves in their proposals. The Global Fund will make grants
only if it has funds on hand to cover the first two years of the proposed projects —
an approach known as the Comprehensive Funding Policy. The policy is designed
to avoid disruptions to projects due to funding shortages. This is regarded as a
particularly important consideration with respect to antiretroviral therapy, since
interruptions in treatment can lead to the emergence of resistant strains of HIV and

4 Remarks by the President, May 11, 2001.
5 Communique dated July 22, 2001.

to the deaths of patients. Funding for the third through fifth years of the projects is
dependent on new contributions to the Global Fund by donors.
The Global Fund has developed a performance-based funding system that
enables it to intermittently adjust funding for projects. The Global Fund reports that
it funds grants in principle for five years, but commits funding for the first two years
only. This enables the fund to assess the progress of the programs and determine if
funding should be renewed. The Global Fund has approved 107 projects for Phase
2 funding totaling $1.1 billion. Some projects were not approved for Phase 2 funding
due to poor performance. Others were temporarily cancelled when accounting
inconsistencies were found. To date, the Global Fund has cancelled one grant. The
decision to cancel the grant in Myanmar sparked debate among policy analysts about
how best to serve humanitarian needs in politically unstable climates. For more
information on programs not approved for Phase 2 funding see CRS Report
RL33396, The Global Fund to Fight AIDS, Tuberculosis, and Malaria: Progress
Report and Issues for Congress.
Through five rounds of grant-making, the Global Fund has directed 61% of its
funding to sub-Saharan Africa; 18% to East Asia and the Pacific; and 9% to Latin
America and the Caribbean. Approximately 7% has gone to Eastern Europe and
Central Asia, while the remaining 5% has been directed to South Asia and the Middle
East/North African regions.6 Approximately 56% of funding has gone to fighting
HIV/AIDS, 31% to malaria, and 13% to TB. According to the Fund, about 51% of
the funding approved is being directed through government-run projects, one quarter
through NGOs and community-based organizations, and one quarter through other
entities, including faith-based organizations and communities living with the
Process and Procedure
The Global Fund accepts grant proposals from national Country Coordinating
Mechanisms (CCMs), which the Fund describes as “national consensus groups.”7
According to the Fund, CCMs should be inclusive and seek representation from all
stakeholders, including government; the NGO community; the private sector; people
living with HIV/AIDS, tuberculosis, and/or malaria; religious and faith groups; the
academic sector; and United Nations agencies represented in the applicant country.8
The Fund views CCMs as essential in assuring true partnerships that involve all
relevant actors in developing a grant proposal, sharing information, and
communicating with one another on Global Fund issues. CCMs can also serve as
forums through which national efforts on AIDS, tuberculosis, and malaria can be

6 “Distribution of Funding After Four Rounds,” at [].
7 The Global Fund to Fight AIDS, Tuberculosis, and Malaria, Guidelines for Proposals,
March 2003, p. 5.
8 Guidelines for Proposals, p. 6.

coordinated and strengthened.9 Applications from individual organizations, such as
NGOs, are permitted only from countries without legitimate governments or in other
exceptional circumstances.
A May 2003 report by the U.S. Government Accountability Office (GAO),
while praising the Global Fund for “noteworthy progress in establishing essential
governance and other supporting structures” and for “responding to challenges,”
noted several problems with respect to the CCMs.10 These included difficulties in
communication between the CCMs and Global Fund headquarters; misperceptions
within CCMs about the roles and responsibilities of the CCM itself and of CCM
members; and, in some CCMs, a lack of information sharing and infrequent
meetings. However, the GAO report also noted that the Fund was addressing these
problems through enhanced communication, holding workshops, including language
describing the duties of CCMs in grant agreements, and other measures.11 In a July
2004 report, the Global Fund acknowledged that the membership of CCMs continued
to be dominated by governments, that people living with the three diseases tended to
be under-represented, and that few CCMs had followed guidelines on gender
balance. 12
Some in the NGO community and among AIDS activists have urged that the
Global Fund impose a set of requirements on CCMs with respect to these and other
issues, insisting that NGO representatives be included in all CCMs, for example.13
Governments in recipient countries tend to oppose such requirements,14 and at its
June 2004 meeting, the Global Fund board decided to continue to deal with these
matters through recommendations.15 However, at its November 2004 meeting, the
board decided to impose some requirements on CCMs, to take effect with Phase 2
renewals from June 2005 and for new grants from Round 5 onwards. Under these
!All CCMs must demonstrate evidence of membership of people
living with and/or affected by the diseases;
!CCM members representing the NGO sector must be selected based
on a documented, transparent process developed within each sector;

9 Guidelines for Proposals, p. 5.
10 GAO Report GAO-03-601, Global Health: Global Fund to Fight AIDS, TB, and Malaria
(May 2004), p. 3-4, 15-18.
11 Global Health: Global Fund to Fight AIDS, TB, and Malaria, p. 18.
12 A Force for Change: The Global Fund at 30 months, p. 17.
13 See the recommendations of the Partnership Forum of participants in Global Fund
programs: “Draft Report of the Global Fund ‘Partnership Forum’” (July 7- 8, 2004),
available at the Global Fund website [].
14 “Draft Report of the Global Fund ‘Partnership Forum.’”
15 Global Fund Observer Newsletter (Issue 29), July 9, 2004. Available at
[ h t t p : / / dspan.or g] .

!CCMs must establish a transparent, documented process to solicit
and review submissions for possible integration into proposals, to
nominate principal recipients, to oversee project implementation,
and to ensure that there is a broad range of stakeholders in the
proposal development and grant oversight process;
!When the principal recipient and the Chair or Vice Chairs of a CCM
are from the same entity, the CCM must have a written plan in place
to mitigate against the inherent conflict of interest.16
The CCM submits a single Country Coordinated Proposal (CCP) to the Global
Fund, where it is reviewed by the 22-member Technical Review Panel (TRP),
consisting of independent experts in the three diseases, as well as others with broader
global health experience. The TRP is tasked with identifying the proposals most
likely to have a “clear and demonstrable impact in the fight against AIDS, TB, and
malaria,”17 and refers those proposals to the Board for discussion and final decisions
on approval.
Within the recipient country, projects are implemented by one or more Principal
Recipients (PRs), which should be agencies or organizations that belong to the CCM.
The PRs are responsible not only for carrying out the project, but also for managing
its finances. Each PR must have an independent auditor acceptable to the Fund,18 but
the work of the PRs is also monitored by Local Fund Agents (LFAs), which represent
the Global Fund within the recipient country and are regarded as the Fund’s “eyes
and ears.” Each LFA is expected to have an in-country presence, enabling it to assess
the capabilities of the PRs and effectively evaluate their financial and program
The identification and selection of LFAs, carried out in conjunction with the
CCMs, was a prolonged process, but ultimately, private sector accounting firms,
management and consulting companies, and the U.N. Office for Project Services
were recruited to fill the LFA role in various countries.19 The LFAs are paid centrally
through the Global Fund, and their fees are not deducted from the grants. The GAO
notes that there are misunderstandings and resentments toward the LFAs in some
countries and that the Global Fund is trying to address these by encouraging local
participation in the work of the LFAs. The GAO is also concerned that it may be
difficult to maintain the independence of the LFAs in poor countries where the ranks
of trained accountants and other experts are thin. In such situations, LFAs may have
difficulty recruiting skilled personnel who are not already involved in the Global
Fund-supported program in one way or another.20

16 Global Fund Observer Newsletter (Issue 36), November 21, 2004.
17 Chrispus Kiyonga, then Board Chairman, quoted in Global Fund press release, March 11,


18 Global Health: Global Fund to Fight AIDS, TB, and Malaria, p.21.
19 Global Health: Global Fund to Fight AIDS, TB, and Malaria, p.14.
20 Global Health: Global Fund to Fight AIDS, TB, and Malaria, p 24-25.